August 23, 2016 / 2:07 PM / 2 years ago

Rusoro says awarded $1.2 billion over Venezuelan seizure of gold assets

TORONTO (Reuters) - Canada’s Rusoro Mining Ltd (RML.V) said on Tuesday it has been awarded more than $1.2 billion by a World Bank tribunal that ruled Venezuela had unlawfully seized the company’s gold assets four years ago.

File picture of a worker inside Simon Bolivar gold mine, legally developed by the firm Rusoro Mining in El Callao in the southern Bolivar State July 14, 2010. Picture taken July 14, 2010. REUTERS/Carlos Garcia Rawlins

Shares in the Vancouver-based mining firm, which is backed by Russia’s Agapov family, more than doubled on Tuesday, trading for as much as 32 cents - their highest level since Venezuela’s asset seizure.

Rusoro, whose shares had a market value of C$83 million ($64 million) prior to Tuesday’s rally, was one of about 20 Canadian miners and other international firms that filed complaints with the World Bank’s International Center for Settlement of Investment Disputes, or ICSID, over Venezuela’s action.

Rusoro, which was the largest gold miner operating in the South American country before the asset seizure, said the ICSID determined that Venezuela had unlawfully expropriated the company’s investments without paying compensation.

ICSID representatives could not be reached for comment. The organization’s website confirmed that a final ruling in the case had been issued on Monday, but did not provide details.

It was not immediately clear whether Venezuela intended to comply with the order, which stemmed from disputes over a 2011 law that targeted international gold firms as part of an effort to overturn “the serious impact of the capitalist mining model.”

While Canada’s Gold Reserve Inc (GRZ.V) this month disclosed it had reached a settlement on a similar case, Venezuela has said it would fight an order from the same tribunal that it pay $1.4 billion to Canadian miner Crystallex International Corp over similar claims.

Rusoro, which has no employees or revenue, is “optimistic” that it can reach a final financial settlement with the Venezuelan government to end the five-year dispute, board member Gordon Keep told Reuters.

The board would probably return to shareholders “a good chunk” of any funds received, Keep said.

Representatives of Venezuela’s mining ministry could not be reached for comment.

The Gold Reserve deal calls for Venezuela to pay $770 million in damages and interest by the end of this year and buy technical mining data from the company for $240 million.

Reporting by Jim Finkle in Toronto; Additional reporting by Anet Josline Pinto in Bengaluru and Diego Ore in Caracas; Editing by Savio D'Souza, Christian Plumb and Paul Simao

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